Shares of National-Oilwell Varco, Inc. (NYSE: NOV) fell more than 6 percent on Monday after the company provided an update to its revenue outlook and a change to its dividend.

National-Oilwell said it expects its first quarter revenue to fall 20 percent year-over-year from $2.7 billion a year ago. However, the company did add that while the outlook remains "challenging," its balance sheet remains "strong financially." Accordingly, the Board of Directors made the decision to slash the stock's quarterly dividend payout to $0.05 per share from a previous $0.46 per share.

National-Oilwell added that its dividend reduction is expected to improve its future net cash flow by approximately $615 million per year. The company said it will invest its saved capital in future growth opportunities and enhance the core capabilities its customers will require when industry activity increases again.

The company cited an industry-wide reduction in E&P capital spending which translates to a diminished demand for its equipment and services.

"We believe reducing the dividend is in the best interest of our company and our shareholders as we continue to work our way toward the bottom of this severe down cycle," Clay Williams, Chairman, President and CEO said.